Healthcare News & Insights

How Graham-Cassidy repeal bill would impact hospitals, healthcare

Although it’s been quieter than past attempts, there’s a renewed effort in Congress to repeal the Affordable Care Act (ACA). And the current proposed legislation may be the most radical yet, with the potential to significantly change healthcare delivery for hospitals and other providers. 

The newest bill on the table is the Graham-Cassidy Act, proposed by Sens. Bill Cassidy (LA) and Lindsey Graham (SC). As written, the bill takes a very different approach than past legislation, such as the American Health Care Act and the Better Care Reconciliation Act, according to an article from CNN Money.

Like the other bills, the Graham-Cassidy Act would repeal the individual mandate for insurance and subsidies to make plans more affordable. Unlike other proposals, however, the act would take the federal money set aside for Medicaid expansion under the ACA and distribute it to states in the form of block grants, using a complex formula based on whether they opted to expand Medicaid, according to an article in Vox.

Per an article from CNN, 34 states would receive less federal money under Graham-Cassidy, while 16 states would get more. The bill’s sponsors say this will equalize coverage and ensure the funds are more evenly distributed across states.

Each state would have the freedom to use any federal funding to create healthcare coverage of its choosing, without any guidelines from the feds. However, the funds would be capped at the standard inflation rate – not the medical inflation rate. And the block grants can’t be used for elderly and disabled patients. States will receive a fixed amount of funding per Medicare enrollee to cover these costs.

The bill would also give states more leeway when it comes to covering pre-existing conditions. Although payors would still be required to offer coverage for everyone, states would have the freedom to charge sicker people higher premiums, depending on the illnesses they have.

One area of the proposed law could be detrimental to hospitals: States would be allowed to deny coverage for the “essential health benefits” established under the ACA, which includes coverage for hospitalizations, mental health treatment and maternity care.

Expedited timeline & impact

Usually, Congress waits to vote on a bill that impacts the economy until it’s been scored by the Congressional Budget Office (CBO). However, this process could take several weeks – and Republicans don’t have the luxury of time with appealing the ACA.

Here’s why: Sept. 30 is the last day they’ll only need 51 votes in the Senate to move forward with a repeal using the reconciliation process. After that, 60 will be required – and that’s a bigger hurdle to jump for passing a bill. So Republicans are pushing the Graham-Cassidy Act without a CBO score, which is causing some controversy.

According to an article in The Atlantic, many groups, including the American Medical Association (AMA), the Federation of American Hospitals and the American Public Health Association, have come out against the bill, saying it’ll hurt millions of Americans by limiting their access to healthcare coverage – especially those from lower socioeconomic groups with pre-existing conditions.

This lack of coverage would impact hospitals as well, limiting treatment options and making budgets smaller. Plus, bad debt and uncompensated care costs could skyrocket as patients would have fewer resources to pay their medical bills.

While some Republicans don’t agree with all the terms of Graham-Cassidy, passing the law may be the last chance they have to make progress toward a repeal. So although its passage is still uncertain, there’s a possibility it may get enough votes to advance. We’ll keep you posted.

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